Nasdaq Lags S&P 500 Futures In Week’s Final Trading Session: What’s Going On – Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), SPDR S&P 500 (ARCA:SPY)

Now that the twin inflation reports are in the rearview mirror, U.S. stocks are hanging onto the slender optimism as traders look ahead to the Federal Reserve’s rate-setting meeting. The numbers did little to belie expectations of a cut at next week’s meeting, although they did pour cold water on a bigger cut. The major index futures are little changed in early trading. Tidings from the tech sector has been mixed, potentially triggering caution amid the week’s runup.

A consumer sentiment report with a few forward inflation expectations readings could be on traders’ radar. Some profit-taking can not be ruled out as traders digest the week’s big gains.

Looking ahead to the Fed meeting, fund manager Louis Navellier said, “The Fed cut on Wednesday is the big news of the month.” “There may be some repositioning going in, but most of the action will come afterward, especially if there is a surprise 50bps cut,” he added.

In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE: SPY gained 0.25% to $560.48 and the Invesco QQQ ETF (NASDAQ: QQQ) rose 0.15% to $473.95, according to Benzinga Pro data.

Cues From Last Session:

Wall Street advanced on Thursday, thanks to a second-half recovery after stocks initially showed muted reaction to the fairly in-line August producer price inflation report and the weekly jobless claims data. After opening slightly higher, the major indices moved back and forth across the unchanged line in a narrow range in the morning session.

Sustained buying in technology stocks, especially those from the communications sector, and the rebound by energy stocks lifted the indices higher in the afternoon. The S&P 500 and the Nasdaq Composite indices closed higher for a fourth straight session, both ending at their highest level since Aug. 27.

The 30-stock, blue-chip Dow Industrials Average has advanced for a second straight day, ending at its best level in September.

Small-caps outperformed, potentially getting ahead of the curve, as the market awaits a Fed rate cut.

All 11 S&P 500 sectors finished in the green, with communication services, consumer discretionary and energy stocks pacing the gains.

With a session to go, the S&P 500 is up about 3.5% for the week, and the Nasdaq Composite a steeper 5.3%. The indices remain on track to rebound from the sharp pullback seen in the week ended Sept. 6.

Insights From Analysts:

Morgan Stanley Chief Investment Officer Lisa Shalett warns against investors hoping for steeper and more rapid rate cuts. The strategist said the Fed will likely be able to achieve the widely hoped-for “soft landing” of not-too-fast and not-too-slow economic growth and subdued inflation. “This scenario likely calls for slow and shallow rate reductions, in quarter-point increments toward 3.5% by the end of 2025,” she said, adding that this could disappoint investors hoping for deeper and faster cuts that could take the Fed funds rate below 3% by the end of the year.

Shalett said the recent labor, economic and financial-market signals have been mixed, warranting cautious optimism from investors. She recommended investors consider owning the equal-weighted version of the index as a better risk-adjusted exposure than the cap-weighted version, and also find compelling trends in financials, industrials, energy, materials and healthcare, plus certain parts of technology like software, and more defensive ideas in residential real-estate investment trusts and utilities.

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Upcoming Economic Data:

• The Labor Department will release its export and import prices report for August at 8:30 a.m. EDT. The consensus estimates call for a 0.1% month-over-month dip in export prices and a steeper 0.2% fall in import prices. This compares to the 0.7% and 0.1% increases, respectively, recorded for July.
• The University of Michigan is due to announce the results of its preliminary consumer sentiment survey for September at 10 a.m. EDT. Economists, on average, expect the headline consumer sentiment index to come in at 68.4, up from 67.9 in August. Traders may also focus on the forward inflation expectations readings from the survey.

Stocks In Focus:

• Adobe Inc. ADBE shares fell over 8% in premarket trading after the documents management software and systems provider’s fourth-quarter guidance failed to satiate the Street.
• RH RH soared about 20% following the home furnishing retailers’ earnings report.
• Oracle Corp. ORCL shares rose about 6% after the artificial intelligence-levered database management software company raised its 2026 revenue guidance at an analyst meeting coinciding with the Oracle CloudWorld conference in Las Vegas.
• Boeing Company BA shed nearly 4% after the International Association of Machinists and Aerospace Workers said 94.6% of voting workers rejected the contract put forward by the company recently, thereby opting to go on strike, beginning on Friday.
• Moderna, Inc. MRNA shares saw follow-through selling after analysts tempered their expectations concerning the vaccine maker. The vaccine maker’s shares slumped over 12% Thursday after it announced sub-par guidance for 2025 and also some cost-cutting measures.

Commodities, Bonds And Global Equity Markets:

Crude oil futures saw additional strength in the early U.S. session, positioning the commodity to record gains for a fourth straight session. Black gold is inching toward the psychological barrier of $70 a barrel. It remains on track to snap a streak of third straight weekly declines, as Hurricane Francine disrupted oil production in the U.S. Gulf Coast.

After scaling the $2,600 intraday Thursday and settling off the highs, gold futures headed higher yet again Friday.

Bitcoin BTC/USD traded flattish but held above the $58K level as traders looked ahead to next week’s Fed meeting.

The yield on the 10-year Treasury note slid 3.4 basis points to 3.646%.

Most major Asian markets, save the Japanese, Chinese and Indian markets, closed higher on Friday, tracking the buoyancy on Wall Street overnight. The Japanese market continued to suffer from the yen’s strength, given the key Nikkei 225 average is heavily weighted with export stocks.

European stocks extended their gains, with most major averages in the region firmer in early trading. The European Central Bank on Thursday cut rates, in line with expectations, as growth sags. The central bank also reduced its growth forecast for the region.

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